Discussion of a VAT as a replacement for the income tax is a valuable part of the fiscal policy debate -- for one thing it would "broaden the tax base and make everyone pay for the welfare state that still has substantial political support." But I doubt the conclusion:
The solution is to make the case for a massive overhaul of the tax system, and transition the system from one that relies on income (corporate and individual and Soc. Sec.) taxation to one that relies on taxing consumption (VAT, National Sales Tax, or FairTax). This is a wonderful opportunity for a party of ideas (Republicans, before they succumbed to corrupt Hastertism) and a vibrant think tank community (before they began to resemble an echo chamber of conservo-libertarian apparatchiks promoting stale doctrine) to lay the ground work for a 3rd and 4th “American Century.”
My fear is that we would have the promise of "a transition," but not the reality, so we'd up with a VAT and the income tax. I still prefer a flatter, simpler version of the income tax. That could be screwed up later, too, of course, as politicians got tired of spending cuts and reverted to their truer "get more to spend" natures, but it would harder for them to hide their actions.
